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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-06-29 Daily Xml
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BACKYARD CAR DEALERS

The Hon. R.P. WORTLEY (14:59): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about backyard car dealers.

Leave granted.

The Hon. R.P. WORTLEY: The term 'backyarders' refers to people who sell second-hand vehicles without the appropriate licence. Given that the buying of second-hand vehicles through a licensed dealer gives consumers better protections, what is the Office of Consumer and Business Affairs doing to crack down on backyard dealers?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (14:59): I thank the honourable member for his important question. I understand that a number of reports from consumers have been made during an operation by the Office of Consumer and Business Affairs to put the brakes on so-called backyard car dealers. I understand that consumers often believe (or are led to believe) that they are dealing with a genuine private seller but that deception often hides many more issues that can end up costing them considerably.

Buyers are often told that the seller of the vehicle has owned the car for years and that the car has been reliable when, in fact, the seller has only recently acquired the vehicle and may not know much at all about the history of the vehicle. In some cases, odometer interference detected by OCBA has been known to be associated with backyard car dealing as well. As the honourable member noted, buying a used car through a licensed dealer affords greater protection for the consumer under the Second-hand Vehicle Dealers Act 1995.

However, it is not just buyers being ripped off. Backyarders can gain a commercial advantage over licensed dealers as they are not required to provide a warranty on any of the vehicles they sell. When purchasing from a licensed dealer, consumers are guaranteed vehicle ownership. They should also be informed of the previous owner's details, as well as receiving a warranty on the vehicle, under certain circumstances. It is unfortunate that backyard car dealing often goes unreported, and it can be very difficult to detect. We rely very heavily on members of the public coming forward when they suspect that something untoward is happening.

However, as a result of OCBA's actions since February this year, I am very pleased to advise the council that, over the past four months, the Office of Consumer and Business Affairs has reported individuals for interfering with odometers of second-hand vehicles and has reported a licensed second-hand vehicle dealer who has allegedly been posing as a private seller, therefore avoiding their obligations under the Second-hand Vehicle Dealers Act 1995. The dealer has been reported for alleged breaches of the Second-hand Vehicle Dealers Act and one alleged breach of the Fair Trading Act 1997.

OCBA has also issued written warnings to licensed dealers about failing to ensure required particulars are contained in their advertising of second-hand vehicles, and to people about carrying on a business as a second-hand vehicle dealer whilst they are unlicensed.

Maximum penalties for these alleged breaches range from $2,500 for a licensed dealer failing to ensure that required particulars are contained in a second-hand vehicle advertisement; $5,000 for interfering with an odometer; and $20,000 for conducting business as a second-hand vehicle dealer whilst unlicensed. I am advised that OCBA is currently investigating further reports of unlicensed second-hand vehicle dealing, and it is anticipated that more alleged offenders will be reported.

This work is a great step in helping to protect consumers and also in helping to create a more level playing field for legitimate, licensed second-hand vehicle dealers. The Second-hand Vehicle Dealers Act 1995 requires that any person who carries on business as a second-hand vehicle dealer be licensed. The act presumes a person to be a dealer if they sell or offer for sale four or more second-hand vehicles in a 12 month period. As I have said, the maximum penalty for unlicensed dealing in South Australia is $20,000. I encourage members to remind their constituents that, if they are aware of unlicensed vehicle dealing, they should report the activity to OCBA as soon their suspicions arise.

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